📊 BBWI Key Takeaways
Is Bath & Body Works, Inc. (BBWI) a Good Investment?
Bath & Body Works is technically insolvent with negative stockholders' equity of -$1.1B against $3.6B in debt, creating an unsustainable capital structure despite current profitability. While the company generates positive operating cash flow ($244M) and maintains adequate margins, declining diluted EPS (-13.9% YoY) amid flat revenue combined with weak interest coverage (3.3x) indicates deteriorating fundamentals with limited financial flexibility for covenant violations or adverse business shocks.
Bath & Body Works shows solid core profitability with a 43.7% gross margin, 15.4% operating margin, and strong free cash flow generation of $865 million, indicating the business remains fundamentally cash generative despite flat sales. However, declining revenue, weaker net income and EPS, modest interest coverage, and negative equity tied to a highly leveraged balance sheet limit the quality of the current earnings profile. The fundamentals support resilience, but not enough growth or balance-sheet strength to justify a more aggressive rating.
Bath & Body Works, Inc. Key Strengths (BBWI)
- Positive operating cash flow of $244M and free cash flow of $195M demonstrate continued debt service capacity
- Solid profitability margins (Gross 42.6%, Operating 16.8%, Net 13.3%) indicate operational efficiency within the retail sector
- Cash position of $820M provides near-term liquidity buffer
- High gross and operating margins for a specialty retailer, indicating durable brand economics
- Strong operating cash flow and free cash flow generation with an 11.9% FCF margin
- Adequate near-term liquidity with a 1.27x current ratio and substantial cash balance
BBWI Stock Risks: Bath & Body Works, Inc. Investment Risks
- Negative stockholders' equity (-$1.1B) indicates technical insolvency and an unsustainable balance sheet requiring either significant deleveraging or sustained high profitability
- Diluted EPS declining 13.9% year-over-year with flat revenue suggests margin compression and deteriorating business quality
- Interest coverage ratio of 3.3x is dangerously low, leaving minimal room for operational decline or debt refinancing stress
- Revenue contraction and double-digit declines in net income and EPS suggest weakening earnings momentum
- High long-term debt burden and only 4.1x interest coverage reduce financial flexibility
- Negative stockholders equity signals an aggressive capital structure and heightens balance-sheet risk
Key Metrics to Watch
- Operating cash flow sustainability and debt reduction progress
- Revenue growth acceleration and gross margin trends
- Debt covenant compliance and refinancing activity
- Same-store or comparable sales growth and total revenue trend
- Interest coverage and free cash flow relative to debt obligations
Bath & Body Works, Inc. (BBWI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Bath & Body Works, Inc. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
BBWI Profit Margin, ROE & Profitability Analysis
BBWI vs Consumer Sector: How Bath & Body Works, Inc. Compares
How Bath & Body Works, Inc. compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Bath & Body Works, Inc. Stock Overvalued? BBWI Valuation Analysis 2026
Based on fundamental analysis, Bath & Body Works, Inc. has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Bath & Body Works, Inc. Balance Sheet: BBWI Debt, Cash & Liquidity
BBWI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Bath & Body Works, Inc.'s revenue has remained relatively flat over the 5-year period, with a 6% decline. The most recent EPS of $3.84 reflects profitable operations.
BBWI Revenue Growth, EPS Growth & YoY Performance
BBWI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $1.4B | $105.0M | $0.49 |
| Q3 2025 | $1.6B | $77.0M | $0.37 |
| Q2 2025 | $1.5B | $64.0M | $0.30 |
| Q1 2025 | $1.4B | $87.0M | $0.38 |
| Q3 2024 | $1.6B | $106.0M | $0.49 |
| Q2 2024 | $1.5B | $99.0M | $0.43 |
| Q1 2024 | $1.4B | $81.0M | $0.35 |
| Q3 2023 | $1.6B | $91.0M | $0.40 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Bath & Body Works, Inc. Dividends, Buybacks & Capital Allocation
BBWI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Bath & Body Works, Inc. (CIK: 0000701985)
📋 Recent SEC Filings
❓ Frequently Asked Questions about BBWI
What is the AI rating for BBWI?
Bath & Body Works, Inc. (BBWI) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 75% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are BBWI's key strengths?
Claude: Positive operating cash flow of $244M and free cash flow of $195M demonstrate continued debt service capacity. Solid profitability margins (Gross 42.6%, Operating 16.8%, Net 13.3%) indicate operational efficiency within the retail sector. ChatGPT: High gross and operating margins for a specialty retailer, indicating durable brand economics. Strong operating cash flow and free cash flow generation with an 11.9% FCF margin.
What are the risks of investing in BBWI?
Claude: Negative stockholders' equity (-$1.1B) indicates technical insolvency and an unsustainable balance sheet requiring either significant deleveraging or sustained high profitability. Diluted EPS declining 13.9% year-over-year with flat revenue suggests margin compression and deteriorating business quality. ChatGPT: Revenue contraction and double-digit declines in net income and EPS suggest weakening earnings momentum. High long-term debt burden and only 4.1x interest coverage reduce financial flexibility.
What is BBWI's revenue and growth?
Bath & Body Works, Inc. reported revenue of $1.4B.
Does BBWI pay dividends?
Bath & Body Works, Inc. pays dividends, with $40.0M distributed to shareholders in the trailing twelve months.
Where can I find BBWI SEC filings?
Official SEC filings for Bath & Body Works, Inc. (CIK: 0000701985) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is BBWI's EPS?
Bath & Body Works, Inc. has a diluted EPS of $0.90.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is BBWI's fundamental grade?
Based on our AI fundamental analysis in June 2026, Bath & Body Works, Inc. has a C grade with 75% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is BBWI stock overvalued or undervalued?
Valuation metrics for BBWI: ROE of N/A (sector avg: 18%), net margin of 13.3% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
What is BBWI's AI grade for 2026?
Our dual AI analysis gives Bath & Body Works, Inc. a combined C grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is BBWI's free cash flow?
Bath & Body Works, Inc.'s operating cash flow is $244.0M, with capital expenditures of $49.0M. FCF margin is 14.2%.
How does BBWI compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 13.3% (avg: 8%), ROE N/A (avg: 18%), current ratio 1.38 (avg: 1.5).